Govt sticking to target of 5,000 compressed bio gas plants by 2024-25
The launch of 200 small scale compressed bio gas (CBG) projects, state led growth, higher commercial sale rates, along with a host of separate policy measures can still boost a key Central scheme to push up CBG production in India, the government believes.
Top officials from the Ministry of Petroleum and Natural Gas (MoPNG) recently told industry stakeholders at a key meeting in Delhi that it will not scale back the target of setting up 5000 commercial CBG plants by 2024-25 under the Sustainable Alternative Towards Affordable Transport (SATAT) scheme.
Launched in 2018, SATAT aims to incentivize production of compressed biogas (CBG) from various biomass sources. But the scheme has lagged behind targets, with the country only being able to establish 46 compressed bio gas (CBG) plants so far. This may change soon, officials said.
Officials told the Global CBG Conference last week that CBG sales have started from more than 100 retail outlets nationwide. The government will also discuss effective offtake guarantees on CBG and bio-manure, as well as low-cost financing, fiscal incentives and carbon accounting system, they said.
States are also expected to take the lead in finalizing projects from now on, they said. Case in point, the Union Territory administration in Ladakh has unveiled plans for setting up 200 CBG plants and 300 community and cluster based biogas plants.
Work in progress
Officials expressed hope that a large number of plants are set to go live soon given that long term commercial agreement for procurement of CBG by oil and gas marketing companies. MoPNG has issued policy guidelines for co-mingling of CBG with natural gas in CGD networks while the Reserve Bank of India has included CBG projects under priority sector lending, they told Business Standard.
“We are working to facilitate the setting up of as many as 200 CBG projects under the umbrella of the GOBARdhan scheme. An announcement will be made soon,” an official said. Launched in 2018, the Galvanizing Organic Bio-Agro Resources Dhan (GOBAR-DHAN) scheme aims to manage and convert cattle dung and solid waste in farms to compost, bio-gas and bio-CNG.
Also, the Central Pollution Control Board has included CBG plants under its ‘white category’ status clubbing them with other industries which are practically non-polluting, the official added. This excuses the plants from seeking green clearances.
Commercial CBG procurement prices may also be raised soon, officials hinted. A key request of the producer industry, minimum procurement prices for the gas was last raised in June 2022 to Rs.54 per kg.
Slow not steady
The government is refocusing its approach to the scheme, officials had told Business Standard in October 2022. Subsequently, in December, the Parliamentary Standing Committee on PNG had noted that the scheme was “burdened by lack of clarity, procedural hurdles and has not enthused investors and entrepreneurs to come forward to set up CBG plants.”
The committee had also recommended that the petroleum ministry should set up a panel to review the letters of intent (LoIs) issued so far and also issue guidelines for fresh LoIs. It had pointed out that as of June 1, 2022, as many as 3,263 LoIs had been issued by oil PSUs such as IOC, HPCL, BPCL, GAIL and IGL.
Land has been finalised in 328 cases and only 97 LoIs had achieved financial closure, it had said. Officials said they are working to make new LoIs more lucrative for the industry.
SATAT has wide-ranging financial implications, given how the government is incurring Rs 75,000 crore worth of capital expenditure for setting up infrastructure for the city gas distribution network. This network is expected to later carry the CBG produced under SATAT, after being synchronised with CNG.
Research institutes working with the government have suggested the need for reinstating the New National Biogas and Organic Manure Programme, which had run till March 2021. Run by the ministry of New and Renewable energy, the programme helped producers in setting up biogas plants.
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